The Family Home Guarantee Scheme

The federal government has launched an initiative to allow single parents to take out a home loan deposit with as little as 2% (subject to being able to service home loan repayments). Here we explore what's involved in this scheme and if you could be eligible!

Article published 24 May 2021

Single parent home loans using the family home guarantee scheme

Under a new scheme announced in the 2021-22 federal budget, single parents will now be able to get a home loan with a 2% deposit.1 The government’s scheme aims to support single parents with dependents (who are predominantly women) to enter or re-enter the housing market. 

This scheme provides a way for single parents to purchase property with less barriers to entry. 

Don't miss out, places in the scheme are limited! To find out how you can apply contact your local Mortgage Choice broker today.

Essential Points

Start Date: 1 July 2021

Latest Release Date: 11 May 2021

Minimum Deposit Required: 2%

Administering Body: National Housing Finance and Investment Corporation (NHFIC)


Family Home Guarantee Scheme explained

If you're a single parent with hopes of buying your home for you and your family, you may be eligible to access the Family Home Guarantee.

In this Mortgage Minute Emma explains the Family Home Guarantee scheme, which allows you to buy a home with as little as a 2% deposit. Watch now to find out more.

What is the Family Home Guarantee Scheme?

The Family Home Guarantee Scheme was announced in the 2021/22 Federal Budget and is expected to be available from 1 July 2021. Based on the success of the First Home Loan Deposit Scheme (FHLDS) for first home buyers and the HomeBuilder grant introduced as a response to the coronavirus pandemic, the Family Home Guarantee Scheme aims to support single parents in their journey to home ownership.

Similarly to the FHLDS, this home loan program is based on providing a lower entry to market by allowing single parents to purchase an existing home or build a new property with a low deposit while avoiding Lenders’ Mortgage Insurance (LMI). Although unlike the FHLDS, single parents will be able to get a mortgage with a 2% deposit as opposed to 5%. Of course when buying a property there will be additional costs involved than just paying a 2% deposit. During the purchase process there are many different costs to consider. Your local Mortgage Choice broker will work in your best interest and can help provide you with an estimate on what costs to expect. Read more on the common home loan costs here.

From the start date 10,000 places will be made available over four financial years to eligible single parents who are looking to build a new home or purchase an existing home. The good news is this program is available to all single parents, regardless of whether you’re a first home buyer or have previously owned your own home. 

Am I eligible for the scheme?

To be eligible for the Family Home Guarantee scheme you will need to meet these basic conditions2

  • Be a single parent with at least one dependent. You will need to demonstrate that as a single parent you are legally responsible for the day-to-day care, welfare and development of your child and that they are in your care. Depending on your situation and terms of any shared custody arrangement, both single mother and father of a child may be able to separately access the Family Home Guarantee as individuals.
  • Australian citizen, at least 18 years of age
  • With an annual taxable income of $125,000 or less for the previous financial year (Child support payments are not included as income for the purpose of the income cap) Please note to apply for a place in this scheme from 1 July 2020 to 30 June 2021, you will need to provide the relevant Notice of Assessment from the ATO for the previous financial year..
  • As a single parent, you must be the sole applicant listed on the loan and certificate of title.
  • You must live in the property you intend to purchase.
  • Although this does not need to be your first home to be eligible for this scheme, you will not be eligible if you do currently own a home, including commercial property, investment property, owning land or a company title interest in land in Australia.

As the Family Home Guarantee is an extension of the First Home Loan Deposit Scheme (FHLDS) by NHFIC, not all properties will be eligible. This scheme holds the same property price limits as the FHLDS that can differ depending on your area.  You will need to check what the property price cap is in your area. 

Table 1 Family Home Guarantee price limits

State/Territory


Capital city/regional centre


Rest of state

Purchase established property

Build or purchase newly built home 

Purchase established property

Build or purchase newly built home

NSW

$700,000

$950,000

$450,000

$600,000

VIC

$600,000

$850,000

$375,000

$550,000

QLD

$475,000

$650,000

$400,000

$500,000

WA

$400,000

$550,000

$300,000

$400,000

SA

$400,000

$550,000

$250,000

$400,000

TAS

$400,000

$550,000

$300,000

$400,000

ACT

$500,000

$600,000

N/A

N/A

NT

$375,000

$550,000

N/A

N/A

Source: National Housing Finance and Ivnestment Corporation3

How do I apply for the scheme?

The scheme will be administered by the National Housing Finance and Investment Corporation, and applications will need to be made through a FHLDS participating lender or through a mortgage broker. There are currently 27 participating lenders across Australia offering places under the Family Home Guarantee Scheme.

Applications have not yet opened, however, you will be eligible to apply from 1 July 2021. 

Contact your local Mortgage Choice broker to find out if you’re eligible – and to find out which lenders are involved in the scheme.

Other ways to help pay for a new home

If you do not qualify for the scheme there are other ways to help you still get your foot in the property market. First Home Owner Grants are subsidies that are set up by individual states and territories to help you buy your first home through a once-off lump sum payment. Be aware though, each state has different rules and restrictions and even amounts available to borrowers. You can read more about First Home Owner Grants here.

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First home buyer 2021 grants guide

If you're looking at buying your first home it's worth knowing what Government help is available. This guide will walk you through all the grants and schemes to help you save.


Download now

Keep an eye out as more information on this scheme will be released closer to the start date. If you’re a single mother or father and are looking to enter the property market, contact your local Mortgage Choice broker to discuss your options and understand if this scheme is right for you. 

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Contact your local broker today and start putting the plans in place now for the future.


Posted in: Home loans

1 https://budget.gov.au/2021-22/content/download/glossy_overview.pdf
2
 https://www.nhfic.gov.au/media/1672/210521-fhg-fact-sheet.pdf
3 https://www.nhfic.gov.au/what-we-do/fhlds/property-price-caps/